Government admits it only has half the money for superfast broadband

Jeremy Hunt, the Culture Secretary, has revealed for the first time that the
government has only set aside half the money needed to roll out super-fast
broadband in rural communities.

Jeremy Hunt admits another £530m is needed by local authorities, private companies and Europe.Photo: GETTY

By Katherine Rushton, Telecoms, technology and media correspondent

11:18AM BST 16 Jun 2011

In December last year Mr Hunt said that he had secured £530 million to fund the upgrade and installation of new broadband lines.

However, in a letter to MPs on Tuesday he admitted for the first time that another £530 million needs to be provided needed by local authorities, private companies and Europe.

Ian Lucas, shadow digital economy minister, said that a combination of the recession and local authority cutbacks meant the government would struggle to keep its promise.

He said: "It's very likely to lead to patchwork coverage and hit growth of businesses that rely on broadband provision."

In his letter, Mr Hunt said he would allocate broadband funding "entirely based on need" but also called on local authorities to bid for the money by explaining how they will secure 100pc broadband coverage at 2Mbps and 90pc coverage of superfast broadband.

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"Local authorities and the devolved administrations will need to provide the remaining funding from their own resources, European programmes or other funding sources," he said.

He said he will announce the funding allocations for each region receives by MPs' summer recess.

Mr Hunt added that the system would speed up the process of getting funding to rural areas, rather than slowing it down, because local authorities will feel "tremendous peer pressure" from neighbouring authorities.